Thermax Shares Plunge 15%, Near 52-Week Low on Weak Q2 Performance

Thermax’s Backlog Grows, but Quarterly Margins Face Pressure

Revenue and orders on hand increased, but weaker profitability and lower fresh bookings unsettled investors.

Revenue advanced, but profit moved in the opposite direction

Thermax shares plunged 15% to ₹2,830 in Friday’s intraday trade after the company reported its July-to-September quarter performance. The stock touched ₹2,744.20, close to its stated 52-week low, while the BSE Sensex was up 0.19% at 79,459 at 9:30 a.m. Thermax had fallen 46% from its 52-week high of ₹5,277.

Consolidated revenue rose 11.4% year on year to ₹2,755.9 crore, with the company pointing to improved operations in Industrial Products and Industrial Infra as it executed its order backlog. EBITDA grew 12.9% to ₹194.1 crore, and the margin edged up 9 basis points to 7%.

Yet consolidated profit after tax fell 5.3% to ₹113.11 crore from ₹119.40 crore. The gap between revenue growth and profit performance highlights the quarter’s central issue: higher sales did not translate into stronger bottom-line growth.

Costs, product mix and an impairment weighed on earnings

Thermax attributed pressure on quarterly profitability to an adverse product mix and higher input costs, particularly in Industrial Products. The company also recorded ₹15 crore in impairment provisions for a hybrid renewable energy project in Green Solutions, following events identified during the quarter.

The results point to uneven performance across businesses. ICICI Securities highlighted declining segment profits in Industrial Products and Chemicals, continued losses in Green Solutions and the mixed contribution from different segments. It also noted a profitability turnaround in Industrial Infra. These factors matter because revenue growth alone may not reassure investors if margins and segment earnings remain under strain.

A larger order balance offers visibility, not a guarantee

Order booking declined 8.2% year on year to ₹3,259 crore, while the order balance rose 15.9% to ₹14,250 crore. The growing backlog provides a base of work to execute, but weaker fresh bookings raise questions about the pace at which new business is coming in. The distinction is important: a strong order balance supports visibility, while sustained order inflows are needed to replenish it over time.

Industrial Products’ bookings fell mainly because major orders were deferred to the third quarter. Industrial Infra, by contrast, saw higher bookings and backlog, supported by two captive power plant orders. Green Solutions reported a decrease after a change in order-book reporting methodology. Thermax said this change did not affect underlying contracts, revenue recognition or financial results, so the reported movement should not be read as a change in those fundamentals.

What investors will need to track next

The immediate test is whether deferred Industrial Products orders convert into bookings and whether higher input costs and product mix become less of a drag on profitability. Green Solutions’ performance also warrants attention after the impairment. ICICI Securities identified operating-margin recovery, Green Solutions profitability and fresh order inflows as key monitorables.

For investors, the quarter presents competing signals rather than a straightforward growth story: sales and the order balance increased, but profit declined and order booking was lower. The sharp share-price reaction reflects those concerns, though it does not by itself determine the company’s longer-term prospects. Subsequent execution and the quality of new orders will help clarify whether backlog growth can support healthier earnings.

Key Highlights

• Shares fell 15% to ₹2,830 in intraday trade after the quarterly results.
• Revenue rose 11.4% to ₹2,755.9 crore, while PAT declined 5.3% to ₹113.11 crore.
• EBITDA increased 12.9% to ₹194.1 crore; the margin improved 9 basis points to 7%.
• Order booking fell 8.2% to ₹3,259 crore, even as the order balance grew 15.9% to ₹14,250 crore.
• Costs, adverse product mix and a ₹15 crore project impairment weighed on profitability.

Investor Note: Thermax’s larger backlog is a positive visibility factor, but investors may want to assess fresh order inflows, segment performance and margin recovery alongside revenue growth before drawing conclusions from the quarter.